B&O Tax On Commissions Rejected by Kent City Council

Last September, Mayor Suzette Cooke sent the City Council a 2015 budget for the City of Kent that included a proposal to increase the B&O tax, and to use those dollars to increase the general fund, instead of retaining B&O taxes for transportation capital projects. The proposal would have increased the B&O tax paid by REALTORS® and real estate firms on their commission income.

But on December 16, 2014 the Council said “No” to both ideas when they passed the city’s 2015 budget. All seven of the City Council members elected instead to approve an $81 million general fund budget that includes the 1% property tax increase allowed by state law, but no increase in the City’s B&O tax.

REALTORS® worked with the Kent Chamber of Commerce over the last two years to craft restrictions on the amount, and uses, of B&O tax collections in order to constrain the use of those funds to street maintenance projects, which was the justification initially offered to support the imposition of a new B&O tax in the first place. However, the Mayor’s office has repeatedly sought authorization for larger B&O taxes than the Council has been willing to approve, and also repeatedly sought to have broad discretion in how the funds could be used instead of seeking to restrict the uses of the funding to the original justification for the tax.